Adjournment (Christmas)

Part of the debate – in the House of Commons at 5:09 pm on 19th December 1990.

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Photo of Mr John Biffen Mr John Biffen , North Shropshire 5:09 pm, 19th December 1990

If I lose the support of my hon. Friend the Member for Chichester (Mr. Nelson) but gain the support of central banker Pal, who am I to complain?

There are voices in continental Europe who take the more open view on how we should conduct our economic arrangements within the wider partnership of Europe, which must include eastern Europe. We must not allow ourselves to be argued into the belief that we are merely representative of one narrow national interest in our desire for looser economic and monetary arrangements for our Community partners and ourselves. I am grateful to my hon. Friend for making that point.

May I be allowed, with tedious repetition, to return to the central point, which we must understand and evaluate—whether we have joined the exchange rate mechanism at a level that will confer a permanent disadvantage on the industrialists and workers of this country, unless and until it is rectified. Gone is the glad morning confidence when the exchange rate mechanism was announced, when there was practically a competition of euphoria between the Treasury Bench and the Opposition Front Bench, then represented by the right hon. and learned Member for Monklands, East (Mr. Smith) but now elevated in status by my neighbour from Shropshire, the hon. Member for The Wrekin (Mr. Grocott). That shows that when the two Front Benches—the Goliaths of Parliament—are in absolute unity, it is time for the grubby Davids and Denises to come out and to search their scrips for their pebbles.

I am delighted to see that there is a growing sense of realism about these affairs. An excellent speech was made by my hon. Friend the Member for Worcestershire, South (Mr. Spicer), who called in question the desirability of the exchange rate mechanism if we are to be in this Lubyanka. [Interruption.] I want to show myself as broad European.

My argument is reinforced by a letter in The Times from the hon. Member for Great Grimsby (Mr. Mitchell). I must mention my pair, the hon. Member for Durham, North (Mr. Radice). I had hoped that our close association would have stripped him of any innocence. He is saying, "Can't we renegotiate?" He believes that those with whom we have joined the mechanism on disadvantageous terms will say, "We are terribly sorry, we did not realise that it would be so difficult for you; of course we shall accommodate a new parity."

We need action a bit more robust than that. Let us be clear: there must be a growing volume of protest in this House and elsewhere that the present terms of the exchange rate mechanism are wholly disadvantageous for this country. Those who feel disposed to argue that are not alone, because those opinions are propounded outside, particularly in the quality press. I have in mind the article of Anatole Kaletsky in The Times, which said: The conflict between Britain's domestic economic needs and the disciplines of the ERM will grow steadily worse. That is the analysis of a man—I have not the faintest idea of his politics—who believes that, if a country joins at the wrong parity, it does not naturally resolve itself. If anything, it will be compounded through time.

My simple message to the Treasury Bench is that this nation is enduring a considerable recession in manufacturing industry—a recession that is spreading to most parts of the economy. We do ourselves no credit to talk about it in terms of something that will be short or shallow. Remedial action should come sooner rather than later. One of the most obvious forms of remedial action is to lower interest rates. Inasmuch as that is also an action necessary to rectify some of the imbalance that is implicit in exchange rate mechanism membership, the sooner it is undertaken the better.